MEDICAL DEVICES AND REAGENTS FOR IMMUNOHEMATOLOGICAL BLOOD TESTING - BLOOD TRANSFUSION INSTITUTE OF VOJVODINA (2019)
The analyzed procedures represent another in a series of cases where the contracting authority refused to provide competition in public procurements related to the so-called closed systems, as well as of the contradictory decision-making of the Republic Commission in exactly the same matters.
Namely, in the subject public procurement procedure formed by lots, the subject of lot 1 were medical devices and reagents for testing blood samples by the microtube method or its equivalent, while the subject of lot 2 were medical devices and reagents for testing blood samples by the microtube method – for the IH-1000 analyzer or its equivalent.
Regarding the quality of the requested goods, the tender documentation required, among other things, that the offered goods correspond / are certified to work on the device IH-500 (for lot 1), or on the device IH-1000 (for lot 2), and to have validated work protocols for this device, as well as that the bidder is an authorized distributor of the goods offered, which was supposed to be proven by certified statements of the responsible person of the device manufacturer. The same was required in the part of the tender documentation that referred to the conditions for participation in the public procurement procedure, with the difference that the words “or its equivalent” were added next to the analyzer’s type and model (IH-500 and IH-1000).
As with all other similar devices, in this case we also have a closed system where the analyzer in question requires only medical components and reagents manufactured and / or approved by the device manufacturer. Therefore, only components and reagents manufactured / approved by the device manufacturer can be used to operate the analyzers IH-500 and IH-1000, and there are no alternative substitutes. The issue of closed systems has long been known in public procurement area and it has been discussed in other case studies as well.
Here, however, it is interesting that from the cited parts of the tender documentation it can be noticed that in some parts of the description of the subject of public procurement (i.e. requirements and conditions), the words “or its equivalent” were used, and in some parts not. This created a dilemma as to what is the real subject of this public procurement – whether only the components and reagents suitable for work on IH-500 and IH-1000 analyzers, so that the subject of public procurement refers exclusively to goods produced or approved by the device manufacturer, in which case there is no competition, or the subject of the public procurement is broadly set so that medical components and reagents are procured for IH-500 and IH-1000 analyzers and other equivalent test systems, which would create competition.
In the public procurement procedure in question, two bids were submitted: the authorized representative of the manufacturer of devices IH-500 and IH-1000 “Diahem-Gramim” Ltd, who offered goods produced or approved by the manufacturer of these devices used by the contracting authority in its work, and the bidder “Alura med” Ltd. who offered the required medical devices and reagents in both lots, but which are intended for use on ERYTRA EFLEXIS and ERYTRA analyzers manufactured by “Diagnostic Grifols”, while offering the customer these test systems for free use.
On April 10, 2019, the contracting authority decided to award the contract for both lots to the representative of the manufacturer of the device “Diahem-Gramim” Ltd. When it comes to lot 1, the bid of the bidder “Alura med” Ltd. was simply ranked second in terms of being more expensive, but no formal shortcomings were noted. In the case of lot 2, however, the bid of this bidder was rejected due to the fact that no proof was submitted that the offered goods were suitable / certified for use on the IH-1000 analyzer, since the subject of procurement referred only to medical components and reagents for that test system. Also, the contracting authority requested microcards with 6 microtubes, while this bidder offered those with 8 microtubes.
The bidder “Alura Med” timely filed a request for protection of rights against the decision on awarding the contract for lot 2, emphasizing that the offer of the selected bidder was unacceptable in both lots of the public procurement procedure: since no catalogs and brochures for the offered goods were submitted, it is unclear how the contracting authority was able to determine at all that the goods offered were in accordance with the required technical specifications. Also, the Applicant disputed the reasons for the rejection of his offer for Lot 2.
Thus, the request for protection of rights states that the subject of public procurement for lot 2 is formulated as “medical devices and reagents for the IH-1000 device or its equivalent”, which means that it was possible to offer medical devices and reagents that corresponded to the device IH-1000 (and not exclusively for that exact device), which the Applicant did, because he offered the required goods for the appropriate device – ERYTRA analyzer, at the same time offering the said device for free use to the customer. The Applicant also disputed the contracting party’s position on the microtubes issue, pointing out that he offered a suitable and certified microcard for the appropriate device, and that 8 microtubes sublimate the request of 6 microtubes, meaning that the bid couldn’t have been rejected since it offered goods that exceeded the required minimum of 6 microtubes.
The Republic Commission granted the stated request for protection of rights and partially annulled the public procurement procedure, returning it to the phase of expert evaluation of bids. The Republic Commission fully accepted the Applicant’s explanations, and ordered the contracting authority to re-evaluate its assessment, in order to eliminate all identified omissions and take into account the Commissions’ views expressed in its decision.
However, after repeating the expert evaluation of the bids, the contracting authority made a decision to suspend the procedure, without acting on the orders of the Republic Commission.
Namely, in its decision, the Republic Commission stated that the contracting authority did not unequivocally determine whether the goods of the bidder “Diahem-Gramim” offered for both lots were in accordance with the required technical specifications, which is why the Commission ordered the contracting authority to determine it and document everything in detail. However, the contracting authority did not do that; instead, it only stated in its suspension decision that the bid of the bidder “Diahem-Gramim” is unacceptable because it cannot be determined with certainty whether the offered goods meet the requirements of technical specifications from the tender documentation. Contracting authority offered no details or documents with this decision.
Also, in its decision the Republic Commission took a clear position that the tender documentation shows that the contracting authority expected the bidders to offer medical devices and reagents for the IH-1000 device or its equivalent, which is exactly what the Applicant did in this case, meaning that the contracting authority had no right to refuse the Applicant’s offer. However, once again the procuring entity completely ignored the conclusions of the Republic Commission, reiterating the same reasons for Applicant bid’s unacceptability that were stated in the contract award decision, and which the Republic Commission determined were not in accordance with the Law on public procurement.
The bidder “Alura med” submitted once again a request for protection of rights to this decision of the procuring entity as well, repeating similar arguments as in the previous request and referring to quite clear positions of the Republic Commission from the decision it made on the originally submitted request for protection of rights.
Once again the Republic Commission granted the Applicant’s request for protection of rights, but this time it took a diametrically different position in relation to its previous decision: this time it annulled the public procurement procedure in its entirety, instead of only partially annulling it, returning it to the expert evaluation phase and insisting on the implementation of its previous positions (eventually the Commission could have fined the contracting authority for not acting on its orders).
Contrary to its previous views, where it determined that according to the tender documentation it was possible to offer medical devices and reagents for other appropriate devices, the Republic Commission has now taken the position that the tender documentation was unclear, inaccurate and contradictory. It stated that the words “or its equivalent” were added only in some parts of the documentation where the exact model of the analyzer was also specified, while all these details were completely left out from some other documents, so consequently it was not clear from the documentation whether the client wanted to procure medical devices to be used only on devices IH-500 and IH-1000 or also for other equivalent devices, which could result in the contracting authority obtaining goods that it did not need.
It is incomprehensible and unacceptable that in the same case, on the same issue and problem, in the same public procurement procedure, with the same and unchanged documentation, and in a situation where two of the three members of the Commission are the same in both right protection cases (therefore, they are thoroughly acquainted with all aspects of the case from the very beginning), the Republic Commission makes such significantly different decisions! From the standpoint of legal certainty and the importance of reliability and predictability in the decision-making of the Republic Commission on the same or similar cases, the position of the Commission must have either been from the beginning that the tender documentation was unclear and contradictory, or the Commission had to adhere to its position that it was indeed possible to submit a bid for medical devices and reagents for other equivalent devices, and it had to insist on the implementation of its orders, with possible fines for the contracting authority.
The result of these actions of the contracting authority and the Republic Commission was the re-initiation of the public procurement procedure with the same subject (as for lots 1 and 2 in the previous procedure), and this time only one bidder participated in the procedure – “Diahem-Gramim”. No shortcomings were noticed in the bids for both lots, nor did the contracting authority have any ambiguities and needs for clarification of the bids. No questions were asked in the public procurement procedure, nor was a request for protection of rights submitted which is logical.
The tender documentation in this procedure was almost identical to the tender documentation from the previously conducted and annulled public procurement procedure in terms of all important elements. The only noticeable difference was the careful removal of the word “or its equivalent” from the description of the subject of the public procurement and the conditions for participation in the procedure.
In this way, with its acts and documentation in this specific case, the contracting authority clearly decided to conduct public procurement within a closed system, i.e. only for devices that it already uses in its work, missing a significant opportunity to open potential competition and move away from the practice of cyclical procurements with only one bidder within single closed system.